Estate planning is an important part of life. An estate plan allows you to set up legally effective arrangements that will meet your specific wishes if something happens to you or those you care about. Not only does a properly drafted plan decide who receives what when you pass on, but it also may minimize the need for a guardianship while you are still alive. Putting it off can have negative consequences not only for yourself, but your family. Peace of mind for your family is very important, and a properly drafted estate plan will accomplish this goal.
One major reason to have a plan is to protect your minor children. If you have minor children, a plan is needed to decide who will care for them and manage their inheritance in the event of your death. If no planning is done, a minor child will receive full control of his or her inheritance at the age of 18. Further the court will decide who will receive custody of your children. Do you want a judge making this decision for you? Putting this off could potentially lead to disastrous consequences. This is a major reason why parents with minor children need to have an estate plan.
In addition, an estate plan will try and minimize your tax liability at your death. Most people think only about the Federal Estate Tax, but there is an Ohio Estate Tax. If you are married and worth more than $338,333, you may be able to save up to $20,000 in Ohio Estate taxes with a properly drafted plan. One area that needs special attention is retirement accounts. These types of accounts are subject to both income taxes and estate taxes when you die. Obtaining professional legal advice for retirement accounts is important. An estate plan will try to minimize your tax liability and allow you to pass your wealth on to future generations.
A major tool of estate planning is the revocable living trust. A trust has the potential to save your estate both Ohio and Federal Estate taxes.
A trust also allows you to control the disposition of your assets from beyond the grave. You decide when and with what restrictions your heirs receive your money. A trust allows you to spread out your heirs’ inheritance. This is especially important if you have minor children. In addition, if your spouse decides to remarry after your death, a trust will protect your assets from going to the remarried spouse's new stepfamily.
Advance care documents are used to plan for incapacity. A living will, a health care power of attorney and a power of attorney for financial affairs are used in this area. The latter two documents are used to allow another person, who you choose, to manage your financial affairs and make health care decisions should you become incapacitated. Keep in mind that spouses are not able to manage each other’s health and financial affairs without powers of attorney. Further these documents are used as part of a plan to avoid the need for an expensive and public guardianship.
Even if you have an estate plan it needs to be updated from time to time, especially if there is a major change in your life. Examples include, when you get married, have a child, get a divorce, blend a family, a fiduciary dies, a change in your financial situation or a change in the law. If you have minor children having a plan and keeping it updated is a must. Your children's wellbeing and future are at stake. The earlier you start planning, the more options you will have. This site provides general information on estate planning and should not be applied to specific legal problems without first consulting Pirnia Law Office for professional legal advice.